Despite Hong Kong’s reputation as an Asian equities powerhouse, hiring in the city’s investment banks now has a distinctly debt capital markets (DCM) flavour to it.

The amount of equity raised in Hong Kong in the first six months of this year was just a third of the volume of offshore debt from mainland companies in the same period, according to Thomson Reuters data. Mainland issuers raised US$70.3 billion in offshore bonds in the first half of 2014, mainly via Hong Kong.

“With the decline of initial public offerings, issuers are attracted to the bond markets in an environment of low interest rates, so DCM teams are hiring at a steady level,” says Stanley Soh, regional director of Asian financial services at search firm Global Sage in Hong Kong.

Chinese banks like BOCI, CCBI, ICBC and Haitong Securities have substantial DCM teams in Hong Kong and are “aggressively” expanding, says Tam. “The demand of talent in DCM is tight as various Chinese and smaller banks, like Wells Fargo, expand their teams in HK. Competition is growing stronger as more banks are fighting over quality deals.”

Meanwhile, headhunters report a flurry of DCM hires among foreign investment banks in Hong Kong since March. Most prominently, Morgan Stanley’s former head of DCM, Vivien Gui, has taken up a similar role at Deutsche Bank, following the departure from Deutsche of Michael Lam, who has rejoined Credit Suisse as head of China DCM.

Such moves reflect the fact that demand for talent in DCM is focused at a senior level, says William Bown, director, global banking, at search firm Sheffield Haworth in Hong Kong. “DCM revenues are increasing and banks want more seasoned originators to help grab greater market share. But there are few bankers who have credible relationships, so those that do will have had a number of calls this year from all across the street,” he adds.

Given the skill shortage, banks in Hong Kong are happy to give guaranteed bonuses to senior candidates. “It’s also to do with the hiring cycle in DCM,” explains Bown. “Debt markets tend to be on fire from January to May, so bankers have already made a significant proportion of their profit for this year and are reluctant to leave a good number on the table without an assurance of being treated appropriately at year-end by a new employer.”

While the ideal senior DCM candidate in Hong Kong is a Mandarin speaker with a mainland network, banks do sometimes recruit from outside North Asia. “Most institutions in HK have an emphasis on high-yield over investment-grade business. There are even fewer bankers locally who know high-yield in addition to having strong relationships in China,” says Bown.

There is still demand for “technically accomplished” high-yield bankers from Europe or the US who want to relocate to Asia, he adds. “The same to a lesser extent also applies to hybrid-capital, securitisation, or other more technical products, where a lack of requisite experience locally means we continue to look West.”